Orascom Telecom reports second quarter loss

Naguib Sawiris, Orascom Telecom CEO

Egypt’s Orascom Telecom, the parent company of the second largest mobile operator Mobinil, reported a net loss of $58.5 million for the second quarter, despite an upsurge in the short-term revenues.

Orascom Telecom was purchased by Russia’s Vimpelcom in March 2011 and has been struggling to maintain its profit margins due to political unrests in North Africa.

Orascom Telecom was expected to report profits of about  $64 million.

Operations outside Egypt played a key part in its current performance.

Orascom currently has business units in Algeria, Pakistan, Bangladesh, North Korea, Namibia and the Central African Republic.

Orascom’s earnings before interest, taxes, depreciation and amortization  (EBITDA) grew by 8% in the last quarter to $476 million. The growth was largely driven by their Algerian subsidiary Djezzy, where subscriber numbers were up 5% in 2010, and the south Asian businesses.

Total revenues came in at around $1 billion, 1.6% above industry predictions. It was a rise of 5.5% on the first quarter but down from $1.06 billion a year earlier.

In Egypt, its Mobinil venture with France Telecom boosted subscribers by 17% but the average revenue per user dipped by 15% due to intense mobile telecoms competition.

Desmond Shephard